Nearly 2,000 Homebase staff could be axed after the DIY chain's Australian owner launched a review of the business that may see up to 40 stores shut.

Wesfarmers, which owns Homebase's parent firm Bunnings UK, said on Monday that trading at the chain has been "poor" as it booked a £454 million impairment charge linked to its acquisition of the retailer.

"The Homebase acquisition has been below our expectations which is obviously disappointing.

The group later confirmed that between 20 and 40 of the worst performing Homebase stores could close down in the latest sign of distress on the British high street.

Homebase operates from 250 stores and employs 12,000 in total in the UK.

Poor trading at Homebase is expected to drag Bunnings into an underlying loss of £97 million for the first half of the year, Wesfarmers confirmed.

"We need to address underperformance in our portfolio that is detracting from positive performance in other areas, and the announcement today sets out decisive actions to achieve this," Mr Scott added.

Homebase

Bunnings acquired Homebase in 2016 in a £340 million deal and has been attempting to reposition the brand.

As well as revamping the stores and slashing prices, Homebase is in the process of being rebranded as Bunnings.

But Wesfarmers said that its review will evaluate the performance of rebranded pilot stores to "inform the future plans for Bunnings UK".

In addition Peter "PJ" Davis, the man who spearheaded the foray into the UK, is to retire from the business with Damian McGloughlin taking his place.

The potential store closures come following a miserable January for the high street, which has seen thousands of jobs disappear after Sainsbury's, Tesco and Morrisons also swung the axe.

Retailers have been hit by a surge in Brexit-fuelled inflation, which has seen the cost of goods rocket and consumer confidence plummet since the referendum result.